Judge Rules Against Store Chain on Contraception

An Oklahoma judge has ruled that Hobby Lobby Stores is not exempt from a Health and Human Services rule requiring private employers to offer workers birth control at no cost as part of their health insurance plans.

A federal judge in Oklahoma has ruled that a national chain of Christian-owned arts and crafts stores is not exempt from a Health and Human Services rule requiring private employers to offer workers no-cost birth control as part of their health insurance plans.

The Oklahoma case is being closely watched because the plaintiff, Hobby Lobby Stores, is the largest private employer so far to challenge the contraception rule, as well as the first that is not Catholic-owned. The chain employs more than 13,000 full-time employees at 514 stores in 41 states, and its lawsuit was joined by a sister company, Mardel, that operates bookstores employing almost 400 people at 35 stores in seven states.

Both firms are owned and operated by Christians who maintain that their religious liberties are being violated by the rule, which requires employers to cover all Food and Drug Administration-approved contraceptives. Private employers that do not comply with the rule face civil fines of up to $100 per day per employee.

U.S. District Judge Joe Heaton’s ruling, issued Nov. 19, is the second in four days on the question of whether private companies can be exempt from the rule, a provision of the 2010 health care overhaul (PL 111-148, PL 111-152) that is being challenged on religious-liberty grounds in courts around the country.

A federal judge in the District of Columbia ruled Nov. 16 that an Illinois-based Bible publishing company can be exempted because it has a strong claim that the regulation infringes on its owners’ religious freedoms.

Overall, five federal courts have now weighed in. Heaton’s ruling marks the second time that a judge has denied an injunction to a private company challenging the government after a court ruled against a Missouri ceramics company in September. Besides the ruling in the Illinois case, two other judges also have granted injunctions, one to an outdoor power equipment company in Michigan and another to a heating and cooling firm in Colorado.

Heaton, a 2001 appointee of President George W. Bush, said in a 28-page ruling that “the court is not unsympathetic to plaintiffs’ circumstances and recognizes that the [health care law’s] substantial expansion of employer obligations results in concerns and issues not previously confronted by companies or their owners.”

But he said the two companies and their owners had not proved that they warrant the injunction they were seeking against the rule, an outcome that would have prevented the regulation from affecting the two firms. The companies were unsuccessful in convincing the court that the rule infringed either on their First Amendment rights or on their rights under a 1993 statute, the Religious Freedom Restoration Act (PL 103-141).

“Plaintiffs have not demonstrated a probability of success on their First Amendment claims. Hobby Lobby and Mardel, secular, for-profit corporations, do not have free exercise rights,” Heaton wrote. “The [owners] do have such rights, but are unlikely to prevail as to their constitutional claims because the preventive care coverage regulations they challenge are neutral laws of general applicability which are rationally related to a legitimate governmental objective.”

The legal battle over the contraception rule is certain to continue, with more than 40 such lawsuits pending, according to the Becket Fund for Religious Liberty, a law firm that specializes in religious defense cases and provided counsel to Hobby Lobby. The firm vowed to “immediately” appeal the ruling to the 10th Circuit Court of Appeals in Denver.

As of now, most of the lawsuits seek injunctions to prevent companies or religiously affiliated institutions from facing fines for failing to comply with the contraception rule. Judges have not yet weighed in fully on the core constitutional questions at issue, but Heaton suggested in his ruling that higher courts may ultimately have the final say on some of those questions.

“The question of whether [Hobby Lobby’s owners] can establish a free exercise constitutional violation by reason of restrictions or requirements imposed on general business corporations they own or control involves largely unchartered waters,” he wrote.